United Liberty

GMAC wants another bailout in addition to the billions they’ve already received from the federal government:

GMAC, the financial lifeline for General Motors Co., Chrysler Group LLC and their dealer networks, is asking the U.S. Treasury for more federal aid beyond the $12.5 billion it’s already received, because it remains billions of dollars short of a capital reserve requirement all bank holding companies must meet.

The request, which is subject to ongoing negotiations, comes as GMAC is caught in a financial game of chicken with Chrysler Financial that could drive some large Chrysler, Jeep and Dodge dealers out of business or force them to sell their operations.

Chrysler Financial, which Treasury has demanded go out of business by the end of 2011, is asserting its first-lien rights on loans to Chrysler dealers. At the same time GMAC, due to its capital shortfall, has asked those same dealers to pay additional collateral on the vehicles they order from Chrysler Group. Many of those dealers borrowed $10 million or more to expand their showrooms, and can’t sell the property for anywhere near what they owe Chrysler Financial.

It’s unclear whether additional taxpayer aid to GMAC would alleviate that problem.

The government already owns 35% of GMAC as a result of the government-financed bankruptcy restructuring of General Motors.

It is time to end this. No more bailouts for companies that cannot sustain themselves and it is time to get the government out of owning businesses (and they had no authority to do it to begin with).